Care for the elderly - should taxpayers fund it to protect inheritances?

[Upwind]

Gordon Brown thinks so:

www.timesonline.co.uk/tol/comment/columnists/alice_miles/article3926958.ece

"The Government is proposing that younger workers should fund the care of the elderly through a new form of social insurance or ageing tax; a ?new social care and support system?, offering protection to all, as the Prime Minister put it. Mr Brown added an astonishing thing: ?We can and must look to give people the opportunity and the support to save for their old age in a way that insures them and protects their houses and their inheritance.?

It is amazing that after all the row over the 10p tax grab, and party fury over inheritance tax freebies to the better-off, Mr Brown is banging that drum again. "
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I think it is disgraceful that a "Labour" government keep transfering wealth from young and poor to old and rich by any means possible. Why should low income workers pay to protect the inheritances of the wealthy?

I can't see how there can be loopholes cupsoftea... it's 100% of everything you own. No trustfunds, no Cayman island companies, nothing. The way people get around paying IHT is because some assets can be passed on, some can be placed in funds and companies which aren't subject to iht and so on. I'm not a tax accountant, so I can't be 100% sure, but it's my understanding if you were going to have 100% IHT it would apply to everything including trusts and companies. My dh is from Jersey and his dad has all his assets held by a Jersey company he owns so on his death he can pass on the company on to my dh without any of it being subject to IHT

the rich would just leave the country headf

crazy situation winebeforepearls, I agree. Spend the money on more crucial things, like social support. Free bus travel costs the government nothing really (I presume it's the bus companies that absorb the cost - the buses are running anyway, the bus company just doesn't get the revenue for that person) but it gives the impression they're doing wonderful things for old people, when really it's just that, an impression.

possibly some would cupsoftea, but like I said it's pretty radical, so maybe not everyone's cup of tea (ho ho! ) Possibly the reduced income tax burden would be an incentive to stay, stay here, pay 20% flat rate income tax and have more money in your lifetime and 100% IHT or go to another country and pay higher tax to their government? Personally I'd choose the former, but I'm not a millionaire.

We have allowed/fostered/encouraged people to be extremely selfish since the war - that is why we have so many social problems.

It should not be possible for a primary school teacher and a fireperson to sell their 750k property, put down huge deposits for their children (thus perpetuating this property nightmare), buy a home in Spain and retire there for 30 years.

Anyone who's immediate thought on reading the above example is "why should a primary school teacher and a fireman not have what everyone else is having" is deluded and been sucked in to this "Affluenza" entitlement feeling.

The rich would inevitably find ways to avoid it, and there would have to exemptions for certain things like farms.

Also the Tory in me would want family firms to be passed on with no tax grab.

Headfairy im not so sure about the bus pass thing, I think local councils pay the bus companies towards running costs, especially on lower used routes.

Our local council have said that the reason we wont be getting gardens this year is because they have had to pay out for bus pases etc. Wonder what excuse they will find next year?

I didn't know that fiodyl, but that's just ridiculous too with council tax rises so sharp. And of course the stupid thing is that elderly people are the ones who are struggling to pay the council tax which is funding their free transport... it's what I hate most about politicians, they do love to take our money off us only to make us come back later with our begging bowl while they oh so generously give us our money back. Why don't they just not take it off us in the first place? (until the end of our lives that is). Surely the cost of running such a complicated welfare and tax system is so burdensome, simplifying the whole thing would save millions... oh hang on, isn't that a Tory policy??? Argh!!!

I worked for 10 years in what used to be called the DSS and the amount of changes we went through in that time was unbelievable. Each time the amounts spent on the changes was phenomenal, and did it improve the system for those using it(or working with it)??????? I think we all know the answer to that......

HeadFairy the Hippy Tory.

A simplified tax system would surely help, but what would all those poor tax accountants do

so depressing.... it's large organisations that are the problem, sometimes you get whole departments that just work to justify their existence... lets fragment the whole country back to county size I say.... actually don't I can see the problems in that. But bureaucrasy is endemic in large organisations, and government organisations are no exception.

Retrain as flower gardners

and perhaps learn how to spell gardeners

The Labour party postively endorse home ownership which is the main basis of wealth in the UK. Yvette Cooper thinks the answer to wealth inequality is for all households to become owner occupiers. It's pure Margaret Thatcher. Their proposal is therefore consistent with this tax since everybody is intended to benefit.

New Labour old Tory.

As far as I'm concerned that's the whole point of owning your home and saving for retirement. So that if you need it you have a choice of care and don't get stuck in the only care home that your local council will fund. I have this arguement with my Mum on a regular basis - she's been asking for ways to move her money to stop that happening so that I will inherit everything. I don't want to inherit everything if it means that she has a miserable old age. It's her money to make her comfortable!

I think the biggest issue is with elderly folk who need extra help IN THEIR OWN HOME, but because they own their own home (worth more than £22K FFS) they have to fund it themselves, but can't afford it.

What are they supposed to do? If they sell their home they will need to live somewhere?

My father will likely be in this situation. And what if I try to look after him when he needs it - then I will cease working and have to take that hit myself (which we can't afford).

It's all bollocks - it just sends the message that people should spend all they earn thoughout their lives, as the govt will simply claw back their savings on their death bed

MrsTittleMouse - There is already legislation in place to stop that sort of thing happening. It's called 'deprivation of assets. She can't give you her house at the point when she anticipates a care home requiremet and expect the state to fund her care. She would fall foul of all sorts of legal obstacles.

Legacy - I thought that many financial institutions offered "equity release" schemes for elderly people in that situation? So your father can draw down his equity to pay for any care he might need.

If your family is determined that your inheritance should remain intact, it might be worth "taking the hit".

Brassica - don't worry, I have already filled her in on that. Plus I pointed out that if she signed over the house to me that if DH and I divorced or were made bankrupt (both very unlikely I hasten to add!) then her house would be sold from under her.

Legacy

My FIL's house isn't taken into account for assessment purposes. However, his meagre savings are and he has to pay a contribution to the "care" he receives from a private care agency via the council.

I put the word care in inverted commas, because what he receives is very poor - about 10 minutes 3 times a day. However, at least it means he can stay in his own home which is what he wants.

However, it is annoying to see the reckless and the feckless receiving free care when he has paid tax/NI all his life and never asked for anything, except his bins emptying, the occasional visit to his GP and the education of his children.

Figroll, the trouble is the "feckless" are too often in that position through no fault of her own. My MIL is, thanks to her XH's daft schemes spending every penny till they were bankrupt and then running off with a woman half his age.

Would you begrudge her free care? If your FIL wants a higher level of care why can't he use equity release to pay for it? It is his choice to make.

I don't see that she is feckless then - just unfortunate.

I am not complaining, by the way, just stating my case - he is fairly happy with his situation and so are we. He doesn't need to use equity release and, quite frankly, at 91 years of age with some dementia I don't think a quick half hour with an equity release salesman is a good idea.

100% inheritance tax what a ridiculously stupid idea. have you any idea what that would do to the economy? Oh but wait there wouldn?t be an economy because no-one would set out to make money because no-one in their right mind wants to ultimately work for the state. And that is what you are proposing after all.

People wouldn?t set out to own their own homes because what would be the point if it?s all going to go to the state? So let?s say all the homes would have to be councel houses, so you would be working all your life to fund the government. No-one would have any assets because no-one would want to hand them all over on their deaths, so people would just live to their means which would mean no-one would own anything, we would be owned by the government. What a great idea, not.

Also, Legacy, you wouldn't need to sell the house, the council put a charge against it so that when the time comes to sell, they can claim their cash! So your relative wouldn't be homeless but you would lose some of the proceeds when you sell.